Table of Contents

Introduction2

Thesis Question2

Japan's Economic Growth3

Savings and Investment4

Effects on Monetary Policy6

African Economy6

African Approach to International Trade6

Policy responses10

Challenges12

Conclusion15

Works Cited17

Comparison between Japan and African Economy

Introduction

A developmental state plays an active role in guiding economic development and using the resources of the country to meet the needs of the people. A developmental state tries to balance economic growth and social development. It uses state resources and state influence to attack poverty and expand economic opportunities. In all countries the state plays some role in shaping the structure and output of the economy. States in different countries use a variety of instruments and policies like the regulation of industry and trade, the redistribution of incomes and assets, the use of fiscal and monetary policies and direct state ownership of key industries. The degree of state intervention depends on whether a government chooses to leave economic development and redistribution to the whims of the free market, or to be a more interventionist or developmental state.

Thesis Question

What type of lessons can African leaders get from the development experience of countries in East Asia?

The era that has been chosen is the era 1960's in which Japan have experienced high and rapid economic growth. The rationale of choosing this era is that despite of the major traumas, downfalls and recession Japan has maintained and survived, and experienced a great economic growth in three decades.

Japan's Economic Growth

The economy of Japan is the third largest in the world after the United States and the People's Republic of China, and ahead of Germany at 4th. According to the International Monetary Fund, the country's per capita GDP was at $33,805 or the 24th highest in 2010. For three decades from 1960, Japan experienced rapid economic growth, which was referred to as the Japanese post-war economic miracle.

To be able to produce goods and services, firms need to employ workers. Therefore, labor is one of the major determinants of aggregate output. Countries with large numbers of people who are able and willing to work (referred to as the labor force) usually also have a high GDP. Japan was ranked fourth, respectively. A high GDP provides countries with a larger pool of financial resources, which can be spent on national defense, allowing them to become regional or even world powers.

Governments across East Asia recognized that to achieve prosperity, they would have to slow down the growth rate of the population. Family planning has been promoted as a national policy in several countries, including China, South Korea, and Taiwan.

Japan, which is a much more mature market economy than Africa, is already experiencing some of these symptoms. It is one of the few countries in the world with a shrinking population, which is going to lead to shortages in the labor market in the future. Therefore, in contrast to the population control measures in Africa, the Japanese government has been trying to encourage families to have more children by providing financial incentives, building more day care centers, and offering women more generous maternal leave policies. Another possibility ...